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As reported by Today's General Counsel, Senators Orrin Hatch (R-Utah) and Chris Coons (D-Del.) recently introduced the Defendant Trade Secrets Acts of 2014 ("DTSA"), which proposes to amend the Economic Espionage Act of 1996 ("EEA") to create the first federal private right-of-action for theft of trade secrets.  Senator Hatch's press release states that U.S. companies lose an estimated $160 billion to $480 billion each year to the theft of corporate trade secrets.  Senator Coons says that the DTSA "will finally give trade secrets the same legal protections that other forms of critical intellectual property already enjoy."

 

As noted by Today's General Counsel, trade secret misappropriation claims are now generally brought under state laws, with significant variations from state to state.  While the EEA made trade secret theft a federal crime, federal criminal laws have not offered sufficient protection.  In fact, the Department of Justice brought only 25 cases of criminal trade secret theft in 2013. The availability of a federal civil cause of action may harmonize U.S. trade secret law, enable companies to develop a unified set of nondisclosure policies with federal protection, create a uniform standard for trade secret misappropriation, and facilitate access to federal courts. 

 

The DTSA bill would provide trade secret owners with important federal rights and remedies, including:

 

ex parte orders to preserve evidence and seize property;

 

• injunctions or royalties in lieu of an injunction;

 

• damages for actual loss plus unjust enrichment to the extent not compensated by an award of actual loss, or a reasonable royalty in lieu of damages measured by other methods;

 

• potential treble damages for willful or malicious trade secret misappropriation; and

 

• reasonable attorney fees for willful and malicious misappropriation, bad faith claims of misappropriation, or motions to terminate an injunction made or opposed in bad faith.

 

In addition to these important remedies, federal courts are simply a better venue for trade secret claims.  Federal courts are better suited to working across state and national boundaries to facilitate discovery, serve defendants or witnesses, or prevent a party from leaving the country.  Here's hoping this bipartisan bill wins the support it deserves.

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